Japan's ultra-long-term government bond market fluctuated violently, and central bank policy and fiscal concerns triggered a chain reaction

PANews reported on May 21 that the Japanese ultra-long-term bond market has recently experienced a "bloodbath" with yields continuously soaring to historical highs. Yesterday, the Bank of Japan released briefing materials used in a meeting with bond market participants, mentioning that the decline in liquidity and demand for ultra-long-term bonds is the primary reason, despite differing opinions. Some market participants urged the Bank of Japan to increase purchases of ultra-long-term bonds or consider terminating the bond reduction purchase plan given the current market collapse. Most agree that slowing the bond purchase reduction pace could alleviate market pressure amid growing concerns about debt issues. The recent statement by the Japanese Prime Minister that its fiscal situation is "worse than Greece" has undoubtedly intensified market concerns. Some argue that these violent fluctuations could trigger chain reaction risks and impact global markets, as they may prompt Japanese investors to withdraw funds domestically. The Bank of Japan will review its quantitative tightening plan at its next policy meeting on June 16-17. If the market begins to see the central bank taking intervention measures or signaling changes to the bond purchase reduction plan, it could put pressure on the Japanese yen exchange rate.